On Becoming a Force for Good
On Becoming a Force for Good
It used to be, not long ago, the common motto for Good Business was “take the money and run.” Other business mottos included “Cash is King” and the all-time American favorite “Greed is Good,” made famous from Oliver Stone’s 1988 movie, Wall Street.
Only a few years ago, in 2004, the fabulously popular show, The Apprentice, thrilled audiences with savage infighting among executives wannabes and The Donald reducing contestants to tears with “You’re Fired!.” At the opening of every show, the words “it’s not personal, its business” flashed across the screen echoing a common sentiment of a decades old business model. Yet by 2007, the thrill was gone. Watching struggling entrepreneurs fired and humiliated started to look like an old Gordon Gekko rerun and audience interest waned. To keep the show alive, the premise changed from “survival of the fittest” cutthroat competitions to celebrities humiliating themselves for their favorite charity. Something in the cultural ethos of profit-at-any-cost had shifted as even The Donald emerged as “a force for good. “
In 2009, we stand at the crossroads of an ethical revolution in business. The global economic crisis has brought to the surface the dark forces of the world of money. A small and vocal few have been writing and speaking about these forces for years. Two good business mavericks, Paul Hawken and Amory Lovins wrote of a new kind of business a decade ago in Natural Capitalism, their ground-breaking treatise on how to make money while saving the planet. It stands as a guidebook for modern sustainable business. Yet few were listening then. At least not enough to usher in change at fundamental levels.
It took a major hurricane to wipe out one of America’s most beloved cities and the world to witness the incredible suffering of innocents to wake us up. The realization that global warming played a part in Hurricane Katrina’s deadly force was a shock to those watching. The film, “An Inconvenient Truth” erased any lingering doubts of our responsibility to climate change for millions of global citizens. Suddenly, in the post-Katrina world, natural capitalism was not such an outrageous concept. While the U.S. has some serious catching up to do to its European sisters, the winds of global consciousness have shifted. Eleven years after Hawken and Lovins’ book, environmental sustainability is no longer a “radical” idea, but an economic necessity.
Which brings us to the global economic crisis, the economy’s Katrina… This financial hurricane set the record for economic gale force winds. Ordinary people awakened to the fact that the very financial institutions they trusted to be responsible had been flagrantly reckless and threatened the economic stability and well-being of every member of society.
News Reports on both sides of the Big Pond are highlighting record profits and enormous payouts for bailed-out bankers. Public rage in the U.S. and the U.K. is increasing by the minute. The tension between the financial system and the general public has not reached this level stateside since 1929. “Gluttony and greed” are the factors named in the hoarding of public monies in private hands. Big banks are taking heat for posting big profits and earmarking bigger bonuses for their fortunate sons. The firms claim their business model of self-interest as their guiding principle. Society’s outrage reveals that pure self-interest is no longer an adequate economic model.
The new business model fit for the 21st century includes an inclusive world-interest in its focus. As environmentally sustainable business takes center stage, the public is demanding a socially sustainable model be incorporated into modern business as well. Goldman Sachs said recently, “We are painfully conscious of being a force for good.” The backlash in blogs, business journals, and newspapers around the nation disagrees.
The old model of profit-at-any-cost that put Gordon Gekko’s real life model Ivan Boesky in jail no longer works in the new millennium. If profit comes at a high cost to society like the record numbers of unemployed, bankrupt, and foreclosed, citizens will look for ways to strike back at the heart of business. That might mean far less consuming of products or services and urgent calls for heavy regulation of formerly “free markets.”
Old-school financier John Bogle, interviewed by market watcher Morningstar, states U.S. banking is experiencing a systemic “crisis” and calls for a “Better Capitalism,” one where we put as much into the system as we take out. The mogul who created his personal fortune by founding Vanguard Group said the current state of finance as well as finance professionals themselves, “have failed us.” He blames the ongoing economic downturn and the state of the wounded financial system on a herd mentality. Bogle says the current ethical standard in business that brought us here “seems to be if everybody else is doing it, I can do it too.” Bogle said in his day, there were “some things you just didn’t do…It was black and white.”
He says the current industry trend to blame government for failing to prevent the crisis is flawed. “What I’m hearing here is you’re blaming the government for allowing you to do what you should have had enough brains not to do in the first place,” continues Bogle. “So it’s endemic to the system, and we have to learn to have a better capitalistic system.”
What Bogle means is that the continuation of the “rip your face off culture” of profit that brought us here is foolhardly at best and economic suicide at worst. The eighty-year old industry legend has ironically become a sage voice for the New Economy.
These days, modern enlightened business minds understand that greed is no longer good. In spite of this sentiment, the financial industry across the globe has failed to emerge as a “force for good.” In fact, quite to the contrary, financial firms are taking more and more for their own pockets and leaving more and more ordinary folks homeless and bankrupt, creating a moral conundrum of astronomical proportions.
How then do we in business make money and still operate as a force for good? Google, for one, seems to have accomplished this business model as well as countless of other businesses listed through the web pages of GoodB. There are movements espoused by Whole Foods mogul John Mackey and business writer Patricia Aburdene that encourage “conscious capitalism.” Other movements include Hazel Henderson’s “ethical markets,” entrepreneurs for “social capital markets,” maverick social investors like Amy Domini of Domini Funds and GoodB’s “Better World Business” movement that represent not just the wave of the future by the wave of the present. These movements have yet to take hold in the slow to adapt financial markets.
We are poised and ready as a society for an ethical revolution in the financial markets. The pursuit of profits without a conscious and constructive connection to the greater society is in peril of becoming extinct. The Elephant in the Room is not an elephant at all, but an out-of-control Tyrannosaurus Rex that looks oddly primitive on the elegant corners of Park Avenue or Wall Street.
The Rex is booking record profits at the expense of investors and citizens alike. The Rex is devouring every bit of pulsating wildlife with its insatiable appetite for more, leaving nothing in its wake but its discarded carcasses. The “survival-of-the-fittest” antiquated business model has become a fascinating display in a natural capitalism museum.
While Wall Street does (and did) a lot of “good” for humanity in philanthropic endeavors, it fails to see that philanthropy is not good business; it’s not business at all. Good Business must include in its operating strategy a clear and concise way to serve the greater society it extracts value from. To be a force for good, it must put at least equal value back into the system it depletes.
What does a force for good in business look like these days? It is a good business model that embraces the “3 T’s” of trust, transparency, and temperance.
Trust is the standard modus operandi of any good business model. In finance, this means honoring clients, shareholders, and the public by serving all involved with honor and integrity.
Transparency is the basic operating strategy for replacing the “rip your face off” culture with creating real value for investors, shareholders, and citizens alike.
Temperance is the self-regulating self-restraint currently missing from market profits and market maker payouts.
The new model for the New Economy is to follow The Golden Rule of Business and put as much into the system as we take out. How do we do that? Rather than taking as much wealth out of the system as we possibly can, we leave enough there for others to sustain themselves too.